Several factors can expand or restrict the derived demand for container shipping and ports:
- Derived. Considers the core derived demand of transportation. Volume growth is primarily driven by economic growth, which increases consumption across all economic sectors. Outsourcing and offshoring, coupled with the complexity of supply chains (multiple actors involved in procurement), provide additional impetus. However, economic recessions have notable effects on demand, particularly when accompanied by trade protectionist measures, such as high tariffs. Automation in manufacturing may also become a factor, as it may involve assembly closer to final markets.
- Substitution. When trades that conventionally involved bulk and breakbulk markets are containerized, volume increases accordingly. Comparatively low container shipping rates can also help attract cargo that is usually carried in bulk. Further, the development of new cargo niches, such as the cold chain and containerized commodities, can help expand the demand. Conversely, volume can decline if no further substitution opportunities remain and container shipping rates are high, thereby removing discretionary cargo that may involve commodities.
- Incidental. Large trade imbalances incite the repositioning of empty containers, which become an incidental generator of growth. If trade measures, including high tariffs, are imposed, they could affect trade flows and reduce repositioning. Better capacity management can help mitigate container imbalances and empty repositioning, reducing volumes.
- Induced. The organization of shipping networks often requires transit through transshipment hubs, which entails additional container handling. If networks are changed to include more direct services, then the volume of containers handled would decline accordingly.
Quantifying the contribution, such as the multiplier effect, of each of these factors remains a challenge.